A Los Angeles federal judge has terminated a copyright infringement lawsuit in favor of the MPAA saying that TorrentSpy's hiding and destruction of evidence made a fair trial impossible. The court explained that "although termination of a case is a harsh sanction appropriate only in extraordinary circumstances, the circumstances of this case are sufficiently extraordinary to merit such a sanction."
The MPAA claims that TorrentSpy willingly and systematically destroyed evidence such as forum entries which pointed to copyright infringements, directories containing copyrighted works and users' IP addresses. A further court session next year will determine what penalties will be imposed - such as closure of TorrentSpy and any other monetary sanctions.
TorrentSpy plans to appeal the ruling, however, saying that it hasn't been proved in court that they infringed copyright and that the decision arose out of a dispute concerning whether or not the site could retain user IP addresses and posts to protect the privacy of its users.